English (India)
12
Jan

EU Industrial Production, U.S. CPI, Treasury Budget

calendar 12/01/2022 - 10:04 UTC

The U.S. dollar traded overall weaker against other major currencies on Tuesday as seen in the performance of the USDX, while against many emerging market currencies the greenback was also positioned weaker with pairs like the USD/ZAR, USD/TRY and USD/RUB all moving lower that day.

Crypto markets were quite upbeat on Tuesday with Bitcoin at times now above $43k after the slump below $40k on Monday, while Ethereum was also up trading well above $3.2k. As Ethereum recovered at a faster pace, the Bitcoin/Ethereum rate clearly fell on Tuesday after reaching a new seven weeks high.

Major stock market indices around the world rebounded higher with indices like the US Tech 100, Europe 50 and Germany 40 all trading well into the green by Wednesday morning. In Asia indices like the Japan 225 (Yen) or the China A50 were also up by Wednesday morning.

A key data release on Wednesday could be the monthly consumer price index (CPI) statistic for the United States, It is expected that the CPI will continue rising on year-on-year basis. In November consumer prices were already up by 6.8% on that basis.

EUR/USD

The EUR/USD pair reached by Wednesday morning a new nine-days high as the dollar also weakened. This comes despite the designated Chairman of the Federal Reserve Jerome Powell clarifying at this confirmation hearing in front of a U.S. Senate committee that rates will need to be hiked and the asset purchasing programs reduced in order to control inflation, which is coming into focus of the U>S. central banking institution.

At this time the euro is trading still mixed against other major currencies, falling in value against the GBP and AUD on Tuesday, while appreciating against the JPY and NZD.

On Wednesday eurozone industrial production data will be published. Later on U.S. Treasury data as well as the CPI for December can be expected.

EUR/USD

Gold

Gold had its best day since mid-December with the price up by more than one per cent on Tuesday. Silver prices also continued to push higher, while platinum rebounded from its recent low. Palladium prices were meanwhile still under pressure trading still lower on a weekly basis.

Gold

WTI Oil

Oil prices moved significantly higher on Tuesday, racing to a new high since mid-November by gaining more than 3.4% over the course of the trading session. Oil prices remained close to the daily high in the late hours despite the weekly statistical bulletin by the American Petroleum Institute (API) indicating only a draw of a bit less than 1.1 million barrels in terms of crude oil inventories, while gasoline and distillate inventories significantly increased by 7.1 million barrels and 3.0 million barrels respectively.

In its Short-Term Energy Outlook (STEO) published on Tuesday, the Energy Information Administration (EIA) indicated that it estimates that global fuel consumption will continue growing this and next year by 3.6 million b/d (2022) and 1.8 million b/d (2023) respectively while also estimating that crude oil production would by next year at estimated 12.4 million b/d surpass the record from 2019 with 12.3 million b/d.

On Wednesday the EIA publishes as usual its weekly data on crude oil, gasoline and distillate stockpile changes.

WTI Oil

US 500

Major stock market indices like the US 500 and the US Tech 100 traded with a strong upside on Tuesday, recovering at this point practically all the losses since Friday. With this in mind the Volatility Index VIX also sharply fell to levels seen before the sell-off on Wednesday last week.

One of the best-performing sectors in the already bullish market sentiment on Tuesday were energy stocks (US Energy ETF +3.44%) with companies like Occidental Petroleum (+7.14%) and Las Vegas Sands (+6.94%) trading significantly higher.

Illumina (+16.76%) stocks were by far the best-performing component of both the S&P 500 and NASDAQ Composite index on Tuesday. Investors were happy to hear that the company big on gene sequencing equipment indicated that it would announce a new revenue record with the coming earnings at the annual JPMorgan Healthcare Conference. The performance of the biotech sector (US Biotech ETF +0.99%) was meanwhile far from spectacular in this market environment with major COVID-19 vaccine companies strongly retracing from their gains on Monday as was the case for BioNTech (-6.07%), Moderna (-5.09%) and Novavax (-3.20%)

Towards the end of the week the first earnings report this year by blue chip companies can be expected on Thursday when Delta Air Lines publishes its numbers, followed on Friday by Wells Fargo, JPMorgan Chase and Citigroup. As usual in the following weeks even more earnings should be expected.

US 500

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